Neutral & Broke

In the fields of trade and diplomacy, Cuba's Castro government last week tore away the last threads of long, close ties to the U.S.

At the United Nations, denouncing the "tragic seven-year period" when a "lackey" of the overthrown Batista dictatorship voted "following the dictates of another country," meaning the U.S., Cuban Minister of State Raul Roa abstained on the question of admitting Red China to the U.N., the only Western Hemisphere delegate to break the line of solid opposition to the Chinese Communists. At home, Cuba raised the tax walls by 30% to 100%, curbing the flow of U.S.-made imports ranging from macaroni to Cadillacs.

The new Cuba, said Roa, does not accept that it "has to make a choice between the capitalistic solution and the Communist solution." Roa proposed "other roads" that "will bring us closer to the underdeveloped countries of Africa and Asia. In the chess game of politics and power, we shall never act as a docile pawn." He praised the "courageous" Algerian rebels (see FOREIGN NEWS), declared his country ready to trade with "Khrushchev, Nasser or Eisenhower." Nonetheless, Roa blithely renewed a request for a cool $30 billion in U.S. aid--Fidel Castro's top-of-the-head estimate of Latin America's needs.

Cuba's new tax schedule was a response to the economic chaos Castro has sown. Tourism and new private U.S. investment, which used to bring in $100 million a year, are reduced almost to zero. Import barriers are designed to save Cuba's foreign-exchange reserves, already down to $110 million, lowest since the sugar market's "dance of the millions" in the 1920s, when sugar dropped from 22-c- to 2-c- per Ib. Apparently to keep in good graces with the General Agreement on Tariffs and Trade, which Cuba signed in 1947, the new levy applies to the foreign exchange transaction rather than to the imported article itself--but the effect is the same. The top tax of 100% hits only luxury items such as airplanes and big U.S. cars. Stiff rates on such items as TV sets (80%), washing machines (60%), chocolate, soda crackers, canned fruit and soup (30%) spread the burden wide across the consuming public.

The duties are certain to depress retail trade, the only sector of the economy that has held up so far. Coming only a week after Castro took to television to uphold taxes of $1 a bottle on rum, the new levies amounted to the Cuban public's first bitter taste of helter-skelter revolution's cost. The prevailing mood was not one of happy self-sacrifice. "Every time he gets on TV," grumbled an ex-Castro supporter, "he costs the country a million dollars."

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